Despite being riddled with various malicious activities, the traditional crypto market has allowed traders to earn profits. This is thanks to some tokens that have performed well over the years. Even in the decentralized finance market, some projects have risen above others and are worthy of mention.
According to statistics, traders have locked up more than $80 billion in all the projects at this time. In this article, we will be looking into the top three DeFi projects at this present time.
Known by its previous ticker name, LEND, Aave started as a project that enabled traders to gain interest on their tokens. It is focused mainly on lending and borrowing in the DeFi market. While its activities are not like a typical bank, all transactions are on the Ethereum blockchain. Aave has done well for itself since its debut in 2017, with the project introducing exciting features along the way.
Aave also applied for a payment license in the United Kingdom, which authorities granted. As a lender on Aave, traders can earn massive interest on close to 20 different assets on the platform. The interest rates fluctuate and are dependent on the demand for different assets by borrowers. If borrowers are interested in DAI, the network allows lenders to provide liquidity at a high-interest rate.
For borrowers, things are somewhat very different as they operate on variable and stable interest rates. For example, the regular interest might be 11.8% and the variable interest 3.61% on a particular day. So what that means is that even though the variable interest changes, the stable interest will be the same for a long time.
Borrowing is one essential activity in the market, and traders take advantage of the Aave to achieve this. Since the start of the year, Aave has performed pretty well, gaining 104% since the beginning of the year.
Uniswap was built in 2018 and has cemented its place as the leading exchange in the decentralized finance sector. Statistics also show that close to 70% of the market share in DeFi belongs to Uniswap. Although new exchanges are now in the market, Uniswap has cemented its place at the top.
Coupled with staying up top, the native token of the exchange, UNI, has been doing well in the market. Most of the early holders of the token got it from an airdrop. The developer rewarded community members with 400 units of the token each for their immense contribution. Uniswap allows users to swap all possible tokens on the exchange.
If the token is not on the exchange, a user can copy the smart contract address and add the token. After the launch of the V2, Uniswap announced that all transactions made would be charged at a stable rate of 3%. Traders who choose to provide liquidity on the exchange will receive 0.3% in rewards on trades made. This means that the more liquidity a trader provides, the higher the returns on the specific token.
In the latest v3 release, liquidity providers can pick a fee out of a possible 0.05%, 0.3%, and 1% if they offer liquidity. Another change is the introduction of the liquidity supply price range. This means that if the liquidity providers can choose a specific price range to provide liquidity. Their rewards will then be based on traders carrying out transactions within their selected range.
Sushiswap entered the DeFi sector as an exchange that mirrored Uniswap but with a yield farming advantage. Presently, they offer the majority of the things that are on platforms like Aave and Compound. The platform has an exchange, a market that allows lending, and a small decentralized app network (Dapp) known as BentoBox.
Users who own the native token of the platform, SUSHI, will vote on major upgrades on the platform. Aside from that, the token holders can use Onsen, a Dapp on the platform that allows traders to carry out their yield farming activities. With 2020 seeing the rise of various protocols take on the name of various foods, the developers decided to stamp the name to follow the trend at the period.
Since the time, Sushiswap has established itself as a top contender and a strong exchange where scam activities are not prevalent. Sushiswap is in 7th place in the list of protocols in the DeFi sector, and traders have staked more than $4 billion in its smart contracts. SUSHI has also seen an excellent run in the market, and the token is up by 108% this year. The rise is because the platform has witnessed a large turnout of users since January.
The three projects named above are gradually at the driving seat in the DeFi sector at this present time, there are some honorable mentions. Maker, created in 2015, is also up there with the three above, seeing a price rise of 200% since the start of the year. Compound, another strong competitor, was created in 2017 by Robert Leshner. Coupled with other things that make it the go-to, its native token has seen a rise of 60% since the start of the year.